2015 (8) TMI 905 - HC - Service Tax

Validity of impugned order - Violation of principle of natural justice - Opportunity of hearing not granted - Held that - The petitioner is correct in her submission that the respondents have passed the impugned order behind the back of the petitioner, without affording an opportunity of personal hearing. When the unit at Coimbatore was closed down way back in the year 2009, and thereafter, they have been functioning only from office at Bombay, the respondents were not correct in sending show cause notice to the Coimbatore address and then passing an exparte order, behind the back of the petitioner therefore, the order in original dated 30.11.2011 is quashed. Consequently, the recovery notice dated 4.2.2015 is also quashed. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Challenge to ex-parte order without personal hearing, Quashing of recovery notice, Direction for personal hearing and cooperation

In this case, the petitioner challenged an order in original dated 30.11.2011 issued by the Additional Commissioner of Customs, Central Excise and Service Tax, Coimbatore, and a consequential recovery notice dated 4.2.2015, on the grounds that the original order was passed ex-parte without affording the petitioner an opportunity for a personal hearing, thus violating the principles of natural justice. The petitioner contended that the Coimbatore unit was closed in 2009, and all operations were being conducted from the Bombay office. The Court agreed with the petitioner's argument, stating that the respondents erred in sending notices to the closed Coimbatore unit and passing an ex-parte order. Consequently, the High Court quashed both the original order and the recovery notice.

The learned counsel for the petitioner argued that the petitioner was engaged in bottling LPG cylinders for industrial customers and had a service tax registration for their Coimbatore unit, which was closed in 2009. The counsel emphasized that all business activities were being carried out from the Bombay office since the closure of the Coimbatore unit. The respondents' standing counsel acknowledged that the recovery notice was a consequential order to the original order and requested the petitioner's cooperation for completing the final assessment. The Court, after hearing both parties, agreed with the petitioner's counsel that the order was passed without affording a personal hearing and quashed the original order and the recovery notice.

The High Court directed the petitioner to appear for a personal hearing on 15th June 2015 at the adjudicating office in Coimbatore and cooperate fully for the completion of the proceedings. It was emphasized that after the personal hearing, the respondents were at liberty to pass an appropriate order based on merits and in accordance with the law. The Writ Petition was disposed of with the above directions, and no costs were awarded, leading to the closure of related miscellaneous petitions.